Tag Archives: Benchmark

Robots Get Off the Bench

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Benchmark’s fascination with robots is paying off not just on the assembly line but with attracting new customers, too.

The EMS company yesterday announced a deal with KeyMe, a maker of automated key-cutting kiosks that will be first deployed in 7-Eleven stores across the New York City area.

The technology itself is neat: The kiosks enable customers to scan and store a digital copy of their keys to enable the creation of a spare copy at a later time eliminating the need for a physical key in order to make a copy.

KeyMe was very clear that Benchmark’s experience with robotics played a role in winning the program. “[Benchmark’s] extensive knowledge in automation, robotics and precision cutting enabled us to develop this revolutionary product, solving an age old problem and ensuring that consumers never get locked out again,” said CEO Greg Marsh.

Benchmark has been installing a series of interactive, programmable robots called “Baxter” designed by Rethink Robotics to perform simple tasks. The human-like machine has two arms, a head and an animated face that can display a range of emotions or thoughts ranging from “I understand” to  confusion. Benchmark uses them for packaging, testing and sorting.

While Baxter isn’t ready for the precision of the SMT line, at $22,000 per unit, he is very affordable. Benchmark not only uses the Baxter series, the EMS company builds them too.

Now, it would appear, Benchmark has gone the next step to leverage that knowledge toward building a new, industrial customer base. As its dependence on IBM wanes, this is an important development.

EMS Q3: Cloudy, with a Chance of Pitfalls

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Checking our pool of 30 or so publicly traded EMS companies that have thus far reported third-quarter earnings, we see an industry that is decidedly mixed.

Exactly half of those in our pool reported net income rose over last year. And 16 said sales are higher.

Of the Tier 1s, Foxconn and Jabil said sales were up, and Foxconn and Flextronics saw higher profits. Celestica and Sanmina-SCI saw revenues fall while Plexus’ and Benchmark’s rose. However, all but Sanmina took profit hits.

Confused yet?

The mid tier EMS groups were no easier to divine. On the larger side, Nam Tai and IMI had great quarters all around, Kimball saw operating profits and sales climb, and Venture’s sales ticked up too (it hasn’t reported profits yet), but Fabrinet (whose recovery continues) saw both figures slip. Key Tronic was up, CTS was down. Scanfil was up, Note was down. Neways was up, PartnerTech was down.

You get the idea.

The good news is, most companies, especially the larger ones, saw higher revenues in the third quarter than they did in the first. This could be another sign that the traditional seasonality has returned, which would be welcome at least because it makes things a little more predictable.

In listening to the various analyst calls and poring over the quarterly reports, it seems many companies reaped the benefit of existing programs in the September period, while those who didn’t were plagued mostly by new product starts, which are a drag on earnings. The former could hide some deeper some concerns, because all programs eventually come to an end, and if overall launches are on the decline, it could spell trouble down the road. This could be why several EMS companies, which collectively tend to be a bit gunshy bunch anyway, warned that the December quarter might be slower than the last.

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Predictions, Revisited

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In mid July, I made five predictions for the second half of this year.

Here’s how I fared:

Prediction 1. All of 2009’s 10 largest EMS companies – Foxconn, Flextronics, Jabil, Celestica Sanmina, Cal-Comp, Elcoteq, Venture, Benchmark and Plexus – will be intact at year end, and with the exception of Elcoteq, will finish 2010 in the same order. Outcome: Fourth quarter sales remain to be reported, but given their outlooks, I nailed it.
Prediction 2. One of the mid-tier publicly traded EMS companies will be acquired, however. Outcome: Nope. After the Sanmina-SCI bought Breconridge (announced in late April), things became awfully quiet, especially given the amount of cash many top tier EMS players have on hand. I’m guessing concerns over end-market visibility coupled with tight external financing are keeping the major players on the sidelines.
Prediction 3. Component availability issues will not ease until mid 2011. Outcome: TBD, but parts are becoming somewhat easier — but not easy — to get.
Prediction 4. Foxconn’s many employee problems will blow over as the media tires of the story. Outcome: Got this right.
Prediction 5. “Computer-aided innovation” will become the big buzzword in software. Outcome: Wrong.
So for those scoring at home, that’s two right, two wrong, and one partial.